The Financial Supervisory Commission (FSC).
Yes.
Bancassurance partnerships are generally divided into the following arrangements:
- exclusive arrangements; and
- conventional arrangements (i.e., bank will distribute the insurance products of insurer without preferential treatment).
For joint promotion activities by and between banks, securities firms, insurance companies, insurance agents/brokers, the Insurance Association of Taiwan promulgated (1) a tripartite model agreement, the Template Agreement for Banks, Securities Firms, Insurance Companies, Insurance Agents and Insurance Brokers Conducting Joint Promotion of other Business; and (2) a bilateral agreement between an insurance company and a bank which has obtained an approval from the FSC to concurrently engage in either the insurance agency or brokerage business. Such model agreements have been reviewed and recognized by the FSC. Though not mandatory, such agreement is usually adopted when the parties conduct bancassurance business in Taiwan.
Yes, either a bank or an insurance company must comply with the requirements and apply to the FSC for approval before conducting bancassurance business.
There is a regulatory requirement that when a bank or an insurance company first enter into bancassurance arrangements, it shall get approval from the FSC. After the first approval being acquired, a bank can deal with any other insurance companies or an insurance company can deal with any other banks without further approval unless the FSC suspends their bancassurance business (due to their violation of laws or regulations).
There is no regulatory restriction for an insurance company or a bank to provide exclusivity to the other party.
The length of the exclusivity is a matter of negotiation between the parties.
There is no regulatory restriction for an insurance company or a bank to provide exclusivity to the other party.
There is a regulatory requirement that when a bank or an insurance company first enters into bancassurance arrangements, it shall obtain approval from the FSC. After the first approval being acquired, a bank can deal with any other insurance companies or an insurance company can deal with any other banks without any further approval unless the FSC suspends their bancassurance business (due to their violation of laws or regulations).
Only when a bank or an insurance company first enters into a bancassurance arrangement, it shall submit the agreement and other required documents to the FSC as part of the
approval process.
After obtaining the first approval for the bancassurance business, a bank or an insurance company can engage in bancassurance business with other parties without submitting
any distribution agreements to the FSC (unless the FSC suspends the bancassurance business due to their violation of laws or regulations).
There is a tripartite model agreement and a bilateral model agreement as mentioned in Question 3 above for joint promotion activities (i.e., bancassurance business) by and between banks, securities firms, insurance companies, insurance agents and insurance brokers. If the model agreement is adopted, the FSC usually does not require the agreement to be modified before granting the first approval for the bancassurance business.
It would be prudent to undertake a competition analysis given the broad application of, and significant penalties for breach under, Taiwan's Fair Trade Act (FTA).
Article 20 (5) of the FTA prohibits any enterprise from restricting its counterparts’ business activity improperly by means of the requirements of business engagement, which is likely to lessen competition or to impede fair competition. "Restrictions" pursuant to the Enforcement Rules of the FTA, refers to the circumstances under which an enterprise engages in restrictive activity in regards to tie-ins, exclusive dealing, territory, customers, use, or otherwise.
Nevertheless, please note that the restrictions are not per se illegal. It is only the "improper" restriction that is prohibited by the FTA.
Yes, although care will have to be taken by the bank in sanitizing the customer information before it is provided to the insurer. According to the Personal Data Protection Law of Taiwan (PDPA), when collecting the personal data form an individual customer, a bank must inform such customer of the specific purpose of data collection (e.g., to be further shared with the insurers, telemarketing cross-selling) and obtain his/her written consent in the form prescribed by the PDPA.
Yes, the PDPA prohibits the dissemination of customer information without the customers’ consent. Appropriate consent should be obtained from customers, and where relevant,
notifications should be issued to customers.
Under the PDPA and the relevant regulations promulgated by the FSC, a customer can ask the bank or the insurance company at any time to remove him/her from the marketing or cross-selling list even after giving his/her written consent to the data collection and use.
There are no laws or regulations applicable to the commissions, fees and other remuneration paid to a bank in connection with bancassurance. However, the Life Insurance Association and Non-Life Insurance Association may promulgate self-disciplinary rules regulating payment of commission from time to time.
There are no laws or regulations applicable to the commissions, fees and other remuneration paid to a bank in connection with bancassurance.
However, if an insurance company does not comply with the selfdisciplinary rules regarding payment of commission, the FSC may hold that there is a defect in the internal control system and therefore impose a penalty.
The regulators respect the commercial arrangements between the parties and do not request information on compensation arrangements for the bancassurance business. However, during financial inspections, the FSC may request information in this respect.
There is no specific product specifications/requirements/limitations for insurance products distributed via banks under the regulations in connection with bancassurance.
None.
Yes, the policy forms used by the insurance company have to be reviewed and approved by the FSC.
Yes, insurance companies own the IP rights to such policy forms.
A co-branding insurance product is not allowed under Taiwanese law as a bank may not directly engage in the insurance business save for in the insurance agency or brokerage business that has been approved by the FSC.
When the bank personnel sell insurance products, they shall ensure customers can distinguish the sale of insurance products from the bank’s business and present relevant insurance solicitor licenses to customers.
Under the bancassurance regulations of Taiwan, the sales personnel for bancassurance can only be employed by the bank, not the insurance company.
- For the banks without approval from the FSC to engage in either the insurance agency or brokerage business, the bank personnel need to be registered under the insurance
agent or the insurance broker. Such insurance agent or broker shall provide periodic training programs to those personnel. The bank is also required to ensure those personnel
complete the training programs.
For banks with approval from the FSC to engage in either the insurance agency or brokerage business, such banks bear the training or oversight responsibility.
- There is no specific law and regulation on this.
Under the bancassurance regulations of Taiwan, the sales personnel for bancassurance can only be employed by the bank, not the insurance company.
No. Under the bancassurance regulations of Taiwan, the sales personnel for bancassurance can only be employed by the bank, not the insurance company. According to the regulations, the space where those sales personnel market insurance products must be segregated from the bank counters.
None.